“Sellers Appear To Be Much More Motivated”
The Post Dispatch reports from Missouri. “Residential sales have slowed nationwide, and the downtown market is no exception. At the same time, an unprecedented number of downtown residential units are in the development pipeline. Those factors probably played a role in Cordish Co. asking the city to make residential condos optional in Ballpark Village.”
“‘They may have looked at all the units coming online and are on the market, and they don’t think the absorption is going to be there,’ said Joe Flaherty, senior adviser for Grubb & Ellis/Gundaker Commercial, in Chesterfield.”
“According to a survey, 1,275 new rental units and 6,088 for-sale units were put on the downtown market from 1988-2006. About 88 percent of those units are occupied, according to the study. Even the strongest supporters of downtown growth say that, at least in the short term, demand isn’t likely to keep up with the supply of new units.”
“‘I don’t want to be naïve about it,’ said Jim Cloar, executive director of the Downtown St. Louis Partnership. ‘There’s quite a bit coming online in the spring, and there will be a natural drop-off (in occupancy numbers). But in the next few years, it will get better.’”
“Demographics, however, suggest it could get worse before it gets better. In all, 834 rental and 471 for-sale units are under construction downtown. Another 2,669 rentals and 865 for-sale condos are proposed or planned over the next five years.”
“If all of the proposed units are built and occupied, the downtown population would increase by about 9,800 people in less than five years. That would be a 50 percent increase over the growth rate from 2000 to 2005, based on the downtown partnership’s estimates.”
“‘I hate to say it like that, but the best thing that can happen to downtown right now is for inventory to go down,’ said Dennis Norman, president of St. Louis Association of Realtors. ‘The market is very competitive, and I am hearing from developers that are doing very well, some that are just holding their own and some that are having a hard time.’”
“But many developers keep going because projects are being driven by tax incentives, rather than market demand, said Dan Woehle, VP for CB Richard Ellis. ‘It would be better if the units come online as the demand builds, but developers are scared that the incentives are going to go away,’ Woehle said.”
The Detroit News from Michigan. “Wayne County posted the highest rate of home foreclosures among major metro areas in the nation during January, seven times more than the national average, while Oakland and Macomb counties took huge hits, too.”
“The Wayne County/Detroit area reported 6,653 new foreclosures in January, more than twice the number reported in December. Meanwhile, Oakland saw a 338 percent increase from January 2006, with 1,324 foreclosures filed; Macomb posted a 108 percent increase, with 1,241 foreclosures.”
“‘It’s not easy to say if we have bottomed out. I haven’t seen a forecast that says when the situation will turn around,’ said Bill Martin, chief executive officer of the Michigan Association of Realtors.”
“Instead, the Realtors association is seeing more anecdotal evidence of mortgage fraud that preys on homeowners trying to lower or refinance their mortgage payments, Martin said.”
The Star Tribune from Minnesota. “In the midst of an already busy season in Burnsville’s ongoing effort to build a downtown, the new owner of condos that sat nearly empty for more than a year in the Heart of the City wants to finally fill the building, and quickly. Having recently taken title, the new owner is selling the remaining condos at discounts of up to $100,000.”
“‘It’s time to sell these things,’ said George Zeller, manager of the Minneapolis firm that bought the mortgage from the bank that made the original loan. The firm is orchestrating a publicity blitz that it hopes will culminate in a one-day sale Saturday.”
“Federal investigators are probing a multimillion-dollar mortgage scheme involving inflated real estate prices, according to court documents, and industry leaders believe the case is only part of a larger problem.”
“Between December 2004 and August 2006, Jill Lehn, a former mortgage loan closing agent from Prior Lake, prepared loan documents that overstated the purchase price of the properties and concealed the overpayments from lenders, according to the U.S. attorney’s office in Minnesota.”
“The scam, uncovered by the Internal Revenue Service, allowed buyers to pocket the difference between the actual purchase price of the property and the inflated mortgage amounts. Lehn was the buyer in a half-dozen of the transactions.”
“Chris Galler, VP of the Minnesota Association of Realtors, said in a recent letter to members that he expects ‘a series of arrests’ in the next month or two resulting from investigations into the Lehn case by the FBI and the Department of Justice.”
“‘We don’t know how widespread [mortgage fraud] is, because finding one person leads to another and to another,’ Galler said.”
“Bill Walsh, a spokesman for the Commerce Department, described mortgage fraud investigations as a ‘web that just keeps unraveling.’ He said the agency issued 25 subpoenas in connection with those investigations over the summer. ‘These are new, sophisticated crimes where everyone in the transaction is involved,’ Walsh said.”
“The boom market in real estate in recent years helped create more opportunities for illegal activity, with much of it passing undetected until loans started going bad. In recent months, mortgage delinquencies and foreclosure rates have skyrocketed.”
“In December, Lehn pleaded guilty to one count of wire fraud and one count of money laundering. She is awaiting sentencing. Since being confronted by FBI officers in August, Lehn has been cooperating with investigators. ‘I’m trying to make the best of a bad scenario,’ she said. ‘I made a mistake. I bucked up, I’m paying the price. I can’t be mad or disappointed at anybody but myself.’”
“Although the spring housing market isn’t going to break any records, it is showing some signs of recovering from the deep doldrums of late 2006, according to data released Monday by four Twin Cities-area Realtor associations.”
“The most telling indicator of what to expect in the coming months is pending sales for January, which were down 6 percent from January 2006, compared with double-digit declines during much of 2006. That’s about 600 fewer transactions than were posted when the market peaked in 2003.”
“Buyers have more choices than ever, too. Inventory remains at record highs’ Last month, the number of new listings was up 5 percent. That, too, is relief from the double-digit increases during 2006, but it was still the highest number of new listings added during January since the boom began six years ago.”
“Steve Hyland, president of the St. Paul Area Association of Realtors, said the median price of pending sales is the lowest in two years. ‘Sellers appear to be much more motivated than we’ve seen in previous months,’ said Hyland, broker in Edina.”
Jill Lehn : “I make a mistake, I bucked up”. I think you mean you f**ked up.
“Since being confronted by FBI officers in August, Lehn has been cooperating with investigators. ‘I’m trying to make the best of a bad scenario,”
No, the translation is “not only am I a SNAKE, but also a RAT. I am not going down alone if I can cut a deal on the backend and spend less time in jail”
And “ratting” out other crooks is a BAD thing?
I don’t get the use of the pejoritive “rat”. Is the alternative, someone “stands up” and protects other criminals, good?
I suppose, if you’re criminally inclined, yes, a rat is a bad thing. But from the perspective of someone who thinks all criminals should be caught…..I don’t see how a criminal, doing something that benefits society (whether or not she benefits) deserves derision.
Clearview, you took the words right outta my mouth.
Something fishy here … DataQuick is changing its sales reporting methodology as of today: “Changes in our methodology to determine the number of sales transactions have resulted in a roughly 10 percent increase, on average, in our historical monthly sales totals.”
http://www.dqnews.com/RRStatChg0207.shtm
“We’re also now including multiple sales transactions. If three homes were bought in the same transaction, we now count them as three home sales, not one sale. These changes increase monthly sales counts by an average of 10 percent. Intra-family transfers are not included, nor are foreclosures until a home is re-sold to a new buyer.”
I take this to mean that there may be a lot more “phantom” inventory that will come on line and further depress prices.
So 1 sale in 20 is for multiple units? I smell specuvestors…
Listing appear to be going up based on these numbers and source. Not good in a larrry goldilock kuntlow story never told scenario.
mid may was 799,000
6/10/06 was 836,471
6/14/06 was 840,935
6/17/06 was 846,120
6/20/06 was 850,317
6/22/06 was 855,892
6/24/06 was 860,647
6/29/06 was 866,037
7/01/06 was 858,675
7/09/06 was 870,854
7/11/06 was 882,239
7/13/06 was 886,055
7/14/06 was 890,896
7/18/06 was 895,022
7/21/06 was 900,000
7/25/06 was 905,170
7/28/06 was 910,001
8/01/06 was 903,718
8/12/06 was 915,336
8/19/06 was 920,755
8/26/06 was 925,176
8/29/06 was 951,242
9/15/06 was 955,352
12/1/06 was 925,170
12/2/06 was 915,258
1/01/07 was 857,760
1/20/07 was 900,302
2/14/07 today 932,055
http://www.ziprealty.com/maps/index.jsp?usage=search&cKey=74rbwvlk
Thanks for the data.
I just saved it into a spreadsheet I’ve been tracking, but I lacked pre 9/15/06 data.
It wasn’t until august of last year that we acheived today’s level… The “spring bounce” will be interesting.
1 million in about… 4 to 10 weeks? That will be interesting!
Got popcorn?
Neil
“According to a survey, 1,275 new rental units and 6,088 for-sale units were put on the downtown market from 1988-2006. About 88 percent of those units are occupied, according to the study. Even the strongest supporters of downtown growth say that, at least in the short term, demand isn’t likely to keep up with the supply of new units.”
And about 12 percent of those units are vacant, according to grade school arithmetic.
“Although the spring housing market isn’t going to break any records,…”
Why does my crystal ball suggest the spring housing market is going to break records?
you don’t have the faith-based crystal ball.
Record inventory, record foreclosures, record price drops,…
Where you guys been? Comrade greenspan just said, this morning, “all the additional housing inventory has been liquidated.”
With his forecasting track record inventory should triple by the end of March.
I think someone drugged up bernake this morning.In his speach he says housing appears to be leveling off.Where is he getting his data? Probably relies on the NAR’s bullsh@t data, garbage =garbage out. We have some real suckers in the stock market now.They have gone from housing to stocks in search of riches.
If he relies on the NAR data what the hell does that mean for the rest of his research????? OMG! We are all in trouble.
“If all of the proposed units are built and occupied, the downtown population would increase by about 9,800 people in less than five years. That would be a 50 percent increase over the growth rate from 2000 to 2005, based on the downtown partnership’s estimates.”
Sho-o-ore
“…Even the strongest supporters of downtown growth say that, at least in the short term, demand isn’t likely to keep up with the supply of new units.”
Likely. I think a new definition is in order. Let’s see…can’t use correct English, and math skills are suspect. Must be a real estate professional at work here.
The odds against such an increase in the downtown population of St. Louis are even greater than would appear from the data presented in the article. The vast majority of the downtown rehabs currently underway in St. Louis are loft conversions of old office buildings and warehouses on the northern edge of what is usually considered the “downtown” area. The most suitable and best-placed buildings were among the first to be redeveloped and occupied; most of the conversions that are still underway are in less attractive locations, in some cases in the near-derelict region to the west of downtown proper.
I suspect that most of the people who actually want to live full-time in downtown St. Louis are already living there or are about to move into the conversions currently nearing completion - the only conceivable market for many of the loft/condos that are still in the early stages of conversion (or planning) is “investors”. One of the newly converted buildings on the western edge of the loft district just had a “fire sale” auction to get rid of the numerous unsold units. Many of these units had been reserved some time ago by individuals who subsequently bailed out; the official story is that the cancellations were due to delays in completion, but I wouldn’t be surprised if many of the would-be buyers saw that the property’s location made it extremely unlikely to hold its value in the current market.
Also not apparent from the article is that there is really very little to lure people into moving downtown unless they are avid sports fans or actually work there. Many of the firms that used to have their corporate offices downtown have either left the area completely or relocated to the area’s real business center in the suburb of Clayton, several miles to the west. Likewise, entertainment venues, restaurants, shopping, etc., have mostly coalesced around several locations in the city’s Central West End and the inner suburbs. In practice, downtown St. Louis is only “downtown” geographically - it has few of the attractions or amenities that are usually associated with an urban center.
‘on the northern edge of what is usually considered the “downtown” area’
aka DMZ (demilitarized zone)
I think this is spot on:
http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20070126
Best line from this piece:
If the Fed hikes rates as I think they will have to, the housing bubble may burst all over again — and then the overall economy really could slow down.
So true, which is sad since we just “hit bottom” and started to recover from the first “burst”.
Take a look at a Nikkei chart and see what happened after the “first buonce.”
Good read chick. I think what is happening is that there is still a lot of money floating around that was extracted from housing.People are still flush with cash from the huge run up.I think as time goes on it will show that the economy has been rideing high on housing.Right now everyone is still spending and partying like there is no end.If the fed keeps raising rates we are going to have a major blow up.
He keeps referring to “economy” and not “wages,” which have remained relatively flat these last 5 years.
Insane housing prices have stretched wages to the breaking point, and there’s no way housing prices can “recover” or “blow through the roof.” A massive housing price correction is in order.
Wages in MI have actually declined. So how will the housing market ever “recover?”
nice post, interesting read.
I’ve been convinced for some time that rate hikes are already “baked in”, and BB with the party line of “contained inflation” is the signal that says….get ready for the punchbowl to go away.
Spot on? The adrenaline hasn’t even worn off yet, so it’s no wonder the patient doesn’t realize he’s dying.
I agree that the Fed would raise before it would lower, but IMO they aren’t budging since any move is a bad one.
Sounds familiar, I voted for it before I voted against it. The bears are right because they were wrong. OhhhhKaaay?
Somehow, I’m missing the logic of the bears being right because they were wrong.
He is saying that, the housing bears (not fundamentals) have tricked the FED into rate policy that will eventually cause the very thing the bears predicted, but not because the bears were right, no no, because they were wrong.
There, that clears it up.
I still don’t get it … is wilykioty a troll?
The housing bears’ warnings would seem to militate towards the Fed’s keeping rates low; does he think a rate increase would save the housing market? (fat chance)
No, he’s saying that the Fed will be forced to raise rates because ex-housing, the economy is still inflationary, ergo, housing will be damaged even more, which will have the follow-on effect of the economy going to pot (which is what the bears had thought would happen anyway).
is wilykioty a troll?”
I don’t think so. He is just making fun of the writers’ convoluted reasoning about how housing bears were wrong about the effect of the housing bust on the overall economy, but that the FED listened to them and it effected the rate policy. And that now, if higher rates come along (supposedly to fight the inflation that the FED is purposely causing, then it may hurt the overall economy, thereby making the bears right, only becasue they were wrong in the first place.
I’m getting dizzy.
I think Francis Bacon once said that if something is so difficult for most to understand, then most likely, the one doing the explaining doesn’t understand what he is saying either.
We’ve known all along that housing bulls are capable of distortion and spin that would give Goebbels a headache.
Think of it this way: Up is down, and down is up.
Or, like my older son likes to tell his younger brothers, “No means yes, and yes means no. Do you want me to hit you?”
These days it’s more like up is up and down is up as well.
inflation is inflation unless its a house than it is appreciation which is a good thing but inflation is a bad thing but they really appear to be the same thing.
See if you can spot all the contradictions. Thanks to http://wallstreetexaminer.com/blogs/winter/?p=433.
http://www.philly.com/mld/philly/business/16693582.htm
“Chrysler announces 13,000 job cuts - TOM KRISHER - Associated Press
In the next three years, 13,000 Chrysler workers will lose their jobs under a wrenching restructuring announced Wednesday that eventually may lead to a DaimlerChrysler divorce.
The Chrysler unit of the German-American automaker announced its long-awaited plan at its Auburn Hills headquarters, saying it would cut 16 percent of the U.S. division’s worldwide work force, a move it hoped would return its U.S. operations to profitability next year.
The plan was announced only hours after Chrysler’s parent, DaimlerChrysler AG, said it was considering “far-reaching strategic options with partners” for Chrysler and that “no option is being excluded” as it reported a 40 percent drop in companywide profit for the fourth quarter. DaimlerChrysler’s U.S. shares rose nearly 7 percent by early afternoon.
“Today’s action by DaimlerChrysler is devastating news for thousands of workers, their families and their communities,” United Auto Workers President Ron Gettelfinger and Vice President General Holiefield said in a joint statement. “While Chrysler Group’s recent losses are not the fault of UAW members, they will suffer because of the reductions announced today.”
The job losses are the latest in a yearlong series of devastating cuts in the ailing domestic auto industry, which likely will lose more than 100,000 jobs in all.
“We believe that this represents a solid plan to return to profitability and lay the groundwork for a solid future,” Chrysler CEO Tom LaSorda said at a news conference.
DaimlerChrysler Chairman Dieter Zetsche said the company was looking into “further strategic options with partners” for Chrysler, but he would not give details about what has been discussed for the ailing U.S. operation.
He added that the restructuring could be the first step, likely followed by a push by DaimlerChrysler to find a partner with which to operate the Chrysler unit, or even find a suitable buyer for it. [With eye-popping payoffs for top executives, of course. - JW]
DaimlerChrysler’s U.S. shares rose $4.33, or 6.7 percent, to $68.78 in afternoon trading on the New York Stock Exchange.
DaimlerChrysler said Wednesday that its fourth-quarter earnings plunged on weaker demand at the Chrysler unit, where sales fell 7 percent. DaimlerChrysler’s profit fell to $761 million, or 74 cents per share, as revenue slipped to $53.7 billion. The Chrysler unit lost about $162.8 million in the fourth quarter.
LaSorda said the company expects to lose money again in 2007, but less on an operating basis than in 2006. He also said the company expects to take a $1.3 billion charge this year for restructuring expenses.”
http://finance.yahoo.com/
“Dow Strikes Record High - MarketWatch - NEW YORK — U.S. stocks rallied Wednesday, sending the Dow Jones Industrial Average to a new record high, as investors cheered soothing words from Federal Reserve Chairman Ben Bernanke on inflation, easing concerns that the Fed would hike interest rates later this year.”
http://www.marketwatch.com/news/story/gold-tops-676-fed-chiefs/story.aspx?guid=%7BA991286F%2D0FD7%2D4934%2DBBEC%2D778FE71384A3%7D
“Gold futures climbed Wednesday, sending their benchmark contract above $676 an ounce for the first time in six months and gaining momentum from Ben Bernanke’s statement that inflation pressures were easing.” [Translation: everyone called "bullshit". - JW]
http://www.chron.com/disp/story.mpl/headline/biz/4551950.html
“North American raw goods costs, including high-fructose corn syrup and aluminum, will climb 9 percent per case in 2007, compared with an average 2.5 percent increase during the past five years, Coca-Cola Enterprises said. The company depends on North America for two-thirds of sales. Coca-Cola Co. will increase concentrate prices in the U.S. by 4.5 percent and in Europe by 2 percent, Brock said today on a conference call with analysts and investors. Sweetener costs will rise at least 20 percent and aluminum cans will go up “midteens,” Chief Financial Officer Bill Douglas said on the call.
Coca-Cola Enterprises, the world’s largest soft-drink distributor, will cut 3,500 jobs after posting its worst loss in at least 10 years on a $2.9 billion reduction in the value of its North American unit.
Shares of Coca-Cola Enterprises rose 42 cents, or 2.1 percent, to $20.95 at 4 p.m. in New York Stock Exchange composite trading for the biggest advance in almost three months.”
Well, I guess Bernanke’s right about the lack of inflation in one regard:
http://www.usatoday.com/money/economy/employment/2007-02-14-wages-usat_x.htm
“WASHINGTON — When Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill Wednesday and Thursday he will likely be peppered with questions about why wages are not rising at a more rapid pace. But he may have to leave lawmakers guessing. That’s because economists aren’t sure why wages haven’t increased at a faster pace even though the labor market is tight.”
“many developers keep going because projects are being driven by tax incentives, rather than market demand”
Would someone tell me specifically what how much tax incentives goverment is giving out and what developers have to do to get the free money? If my government is subsidizing me to be in real estate, I might be better off quitting my job and be a developer j/k. As a taxpayer, I want to know how my tax money is being used to screw me up in this bubble.
I agree. Does anyone know?
Tax credits for restoring good historical housing stock in need of major rehab (shells, or close to shells). I sold my first houses to a developer taking advantage of said credits to rehab the rental we owned. The houses were from 1904 and around 1920.
This is just a way or recovering quality housing stock that’s been neglected since the rise of the suburbs.
The buildings they are converting to condos are historical in nature (and great architecture). My home was built in 1885, and it’s in the most walkable neighborhood in St. Louis, Soulard.
Preserving housing stock that has stood for over 100 years is probably something I would support subsidizing. St. Louis has some great historical neighborhoods.
Fellow Soulardian and daily lurker here. I will agree with the above that in these situations where there is existing historic architecture it makes sense to encourage rehab. That said, are you ready for the annual defacement of Soulard, er, I mean Mardi Gras?
In the case of the loft conversions of warehouses and office buildings along Washington Ave. and adjacent streets, the tax credits in question are not necessarily related to the historical/architectural value of the buildings concerned: in some cases they’re Brownfield Redevelopment Program remediation tax credits to cover the cost of removing hazardous material like asbestos, etc., from former commercial and industrial properties. Here’s an article from the SLBJ about the tax credits awarded for rehabbing 1641 Washington:
http://stlouis.bizjournals.com/stlouis/stories/2006/05/08/daily66.html
“My home was built in 1885, and it’s in the most walkable neighborhood in St. Louis, Soulard.”
You are lucky it is still standing. Strangely, not more than two hours ago, I was looking at an old Post Dispatch photo of the house where my grandmother grew up between Jefferson, Benton and Warren Streets, taken in 1970. The photo vividly documents that the rotisserie plan for getting rid of unwanted real estate has been around for a long time.
Tornadoes, earthquakes, and neglect are the only real threats to the older homes (original brownstones). Tornadoes, while not uncommon around St. Louis, are extremely rare in the city. An earthquake would be devestating. Neglect can be addressed via tax credits…
Signs of recovery, according to the Star Tribune? The data says YOY sales are down, inventory is at record highs, and the median price is down. Then they quote the President of the local realtors association stating that sellers are motivated. Maybe, just maybe, you could spin the data to claim that the market is not crashing as fast as last year. But for a reporter to write that this shows signs of a recovery is just pure crap. The integrity of journalism in this country may be crashing faster than the housing market! This reporter probably has some vanishing equity to protect!
The (liberal) STRIB is very friendly to “housing experts” who wish for higher prices or, at least, no depreciation. The St.Paul Pioneer Press, supposedly more conservative, tells it more like it is.
I think Mpls / St Paul economy is heavily dependent on Banking & Building. Not good in 2007, 2008, beyond…
I recall along 494 in Bloomington are large office buildings for GMAC, US Bank mortgage divisions.
“With oil prices having fallen in the fourth quarter, we know that net imports were lower — and that contributes to reported growth. And we know that consumer spending was up — and that contributes to reported growth, too.”
But didn’t I just read we had another record trade deficit last month/quarter? And didn’t consumer confidence fizzle to? Including retail sales?
With home-equity extraction drying up, the two things driving this economy (in my opinion) are the aging population (ie, health care) and consumer credit spending (hence the -1% savings rate). The former will continue to drive the economy; the latter cannot.
Michigan should really scare more people than it is. It is during the ‘goldilocks’ economy plummeting headlong into a scary area. Michigan should take a long look at trying to secede into Canada. Michigan gets the universal health to reopen auto factories at a lower cost to the big 3. The big 3 hasn’t closed a Canadian plant in a long time. Canada secures the borders of the two largest great lakes (Huron and Superior) and will likely have the most freshwater in the world. Also, I would move back to Michigan.
Careful what you wish for, Andy. If Michigan became part of Canada, then fights over the Michigan-Ohio State game would be grounds for war.
Andy,
I think this is the best thing that could happen for Michigan. Since the admin is insisting the economy is strong, employment is high, and wages are going up, I believe Michigan has already been dropped from the Union. They had to, it was screwing up the spin.
Andy, if you’re from there, you might know better, but to me Michigan could be set for something good. If they can ever unload the car industry and get some entrepreneurs in there:
1. They have a great state university system.
2. The place is crawling with engineers (granted they are the ones designing the oversized SUVs with cup holders for supers-sized sodas. That might be management’s fault)
3. The geography is beautiful. More lakes than Minnesota, the UP…
4. On the whole, they are neither commie liberals nor Right wing nuts. (There some there, but not the vast majority)
“On the whole, they are neither commie liberals nor Right wing nuts. (There some there, but not the vast majority)”
This is the same state that re-elected a Canadian governor after suffering a single state recession. The entire east side of the state is littered with liberal whackos. How can you say that it isn’t?
That same governor’s answer to the problems of the state is to increase the overall spending by 2.2% and raise taxes! Now tell me how that’s going to generate job growth again?
I’ll give you the university system. The problem is in MI those public universities have tuition that’s comparable to better private colleges. Another problem is they teach directly to the auto industry. Since the industry is hurting, those graduates have to leave the state to find work.
MI has always put too much emphasis on the big 3. Instead of creating multiple streams of business and jobs they had all of their eggs in one basket. That basket dropped and lots of the eggs broke.
My prediction is 25 years before a meaningful recovery in Michigan. At that point they will have bled enough residents that there is no way to move but up.
Bad Andy, I’ll agree with you on the Michigan university system — I’m a Wolverine. But the teaching directly to the auto industry is why I avoided the U-M business school like the plague. I wanted to do Something Else with my life. Yes, I ended up in business, but I got my education at the University of Hard Knocks.
I got my hard knocks at U-M Ann Arbor — was repeatedly beat up late in my second year in my dorm (west quad) by a couple of ‘athletes’ for thier amusement (I was a typical EE nerd then). Seeing how they would go onto win a national title the next year, the police/security basically told me they didn’t belive me - visible physical injuries not withstanding. I must have been drunk and fell down the stairs they said. repeatedly. Yeah sure. I left campus, and MI, for good the week before finals, moved to TX and never looked back.
I do say that MI is toast - It’s still way too much of a 1-trick pony (2 if you count edu/govt) and populace has been entrenched in that thinking for generations. DCX has been the only domesic that has gotten close to even partially “getting it” (since early 90’s with LH/PL/etc) about how things have changed, and they’re having a tough time at #4. Ford and GM remind me of the builders who are still building away. What worked in the past is not going to save their corporate arses now.
As I said, if they can unload the car industry (or when it whithers)
Michigan is odd in that it pioneered urban flight and now has been 15 years into a youth flight. They have great colleges but all the promising graduates leave. I don’t know how to check, but between the youth flight and don’t move from your house tax break, I think Michigan has one of the fastest aging populations around.
Why? Jobs. The unions have had a last in, first out policy forever. Of all the great people I went to school with 2 are in state currently and both have largely work on the gov’t side.
Canada would need to want the land and water to do it, the appeal of improving their Olympic basketball team nonwithstanding. Since they will have to (and I’m not kidding) demilitarize Michigan to fit with their gun laws. Not just Flint, Saginaw, Detroit, but up north (where the Michigan Militia is). I’d imagine that with tranport engineers and a huge manufacturing base the Province could be a leader in producing US Military equipment. Also without guns there would be a serious deer problem, unless bow season gets way more popular.
The idea of signs in French in Michigan would be pretty funny, but whatever Detroit (outside of New Orleans) has more things named after the French than any US city I can think of.
we could trade quebec for michigan, as most of them are now in Florida anyway
Speaking of stubborn sellers —
OC Prices at 600K, ZERO movement from one year ago and down 4.8% from Dec06, OC Home Prices slip from December
I thought Gary said it was in the bag
From 05 “Mr. Good ‘n’ Plenty” High hopes for Housing
Housing evangelist still crying out!
Real Estate Economist forcast july 06
Dissent on housing Descent One of Gary’s best quotes with the famous “Tail Wind” comment
Gary Watts, the Mission Viejo broker and economist, says “I would imagine that a ’soft landing’ would have home price appreciation equaling the inflation rate, but O.C. home prices won’t even be in the ‘approach pattern!’ We are and will continue to climb to an ‘altitude’ (with price gains) between 10 percent and 12 percent this year. And if we pick up a tail wind in the latter half of this year, we may climb to 15 percent. Next year’s appreciation should also keep O.C. home prices up in the air with no plans for landing anytime soon.”
Watts forecasts 7% gain in O.C. house prices in 07
Maybe we should start a Gary Watts thread, it might actually top 450 posts! Maybe good therapy for us all!
I wonder if the Orange County Register is going to run an update on that July, 2006 article and show how wrong that forecast was (and is).
why not put signs outside his office ?
watts, the 12% bagman
For some reason, the Atlanta housing market does not get a lot of media coverage–despite having a 30+ percent YOY inventory increase in 2006 and consistently having one of the nation’s highest foreclosure rates. So I wanted to pass along some ancedotal evidence about what seems to be going on in Atlanta. As background, I am an Atlanta native, born here many many years ago, come from a family that was in the home building industry, & have worked in the building industry myself. Today I drove to a business location about 15 miles from my home, that was more convenient to get to by secondary roads, rather than via the interstate. I passed through very well to do neighborhoods, upper middle class neighborhoods, and middle to lower class neighborhoods. EVERY street in an area that allows directional signage had a for sale or for rent sign. This is NOT AN EXAGGERATION. I have NEVER seen so much product on the market. But for some reason, prices are not falling YET. I guess reality has not hit most sellers here.
Kid Clu
I too live in Atlanta, although I am outside the perimeter. I and my fiance have been holding off purchasing a home due to those on this blog that feel that housing here in Hotatlanta will be part of this housing down cycle. Also, on my way from work I usually make it a game to count the for rent/sale signs on certain streets. Before today a street less than 1/2 mile long had 6 for sale/rent signs. Today, a new for rent sign was added. This is getting scary.
This slow motion train wreck is becoming distinctly less slow. The news on this blog is starting to read like a satire piece lampooning housing bears on The Onion, from a year ago. I’m not a homeowner, but I’m starting to get scared…there are going to be hundreds of thousands of desperate folks running loose, and that’s never good.
Desperate mortgage owners make me feel unsafe. Maybe we could stimulate the economy by declaring them terrorists and expanding the Department of Fatherland Good Feeling.
I suppose all most of them will want is my money, and I don’t have that much, nor am I particularly interested in trying to amass any at this stage of the game. Maybe I am overreacting.
‘Sellers appear to be much more motivated than we’ve seen in previous months’
Buyers, OTOH, are nowhere to be seen.
In the STRIB article, the president of the St. Paul Area Association of Realtors, is supposed to have stated that while the overall median price of active listings remains consistent with the past 12 months, the median price of pending sales is the lowest in two years. Doesn’t that mean that most sellers stick to their wishing prices (overall median) and cannot sell, while buyers demand successfully lower prices on those houses they do buy (median of pending sales)?
Russ Winter’s blog had a good comment on this:
http://wallstreetexaminer.com/blogs/winter/?p=287
“Yet other markets seem to be suffering from severe cognitive dissonance: Minneapolis 1.7 demand and 2.8 pricing …”
A quote from our fed chairman today:
striking an upbeat chord, Bernanke said the economy is likely to grow at a “moderate pace” in 2007 and 2008. That comes despite a dramatic slowdown in the housing market that has so far had little dampening effect on consumers, the lifeblood of the economy.
Little effect? That’s like a little pregnant. Paint it any color you want but this baby is going to come out ugly.